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    Fear Free Retirement: Enjoy Financial Peace of Mind
    Fear Free Retirement: Enjoy Financial Peace of Mind
    Fear Free Retirement: Enjoy Financial Peace of Mind
    Ebook120 pages1 hour

    Fear Free Retirement: Enjoy Financial Peace of Mind

    By Richard E. Gearhart

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    About this ebook

    Financial security during retirement is no guarantee. In fact, Outliving Your Money is the #1 fear among retirees. Not far behind are the fears of Losing Principal, High Health Care Costs, and Higher Taxes.

    Most people, including many financial advisors, do not know that each of these fears can be replaced with guarantees and control. This book shows you how.

    What would it be worth to eliminate these fears and not have to worry about uncertainty? You can guarantee financial security during retirement.
    LanguageEnglish
    PublisherAuthorHouse
    Release dateFeb 7, 2011
    ISBN9781456735739
    Fear Free Retirement: Enjoy Financial Peace of Mind
    Author

    Richard E. Gearhart

    Rich Gearhart is a Chartered Financial Consultant and owner of Asset Preservation Specialists. He has more than 35 years of experience in the investment and financial services field and has earned numerous industry awards for excellence. In addition to his consulting work, he hosts seminars for non-profit groups and businesses nationwide. He lives with his wife near Chicago, in the town of Schererville, Indiana.

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      Book preview

      Fear Free Retirement - Richard E. Gearhart

      Table of Contents

      Introduction

      Section 1: Eliminate Your Fear of Outliving Your Money

      Chapter 1: The Right Tool for the Job

      Chapter 2: Net and Gross Income

      Chapter 3: Assumptions

      Chapter 4: Retirement Income Options

      Chapter 5: Guaranteed Income Stream

      Chapter 6: Annuities

      Section 2: Eliminate Your Fear of Losing Principal

      Chapter 7: What Financial Recovery?

      Chapter 8: Market Options

      Chapter 9: Insurance Companies

      Chapter 10: Comparisons

      Section 3: Eliminate Your Fear of High Healthcare Costs

      Chapter 11: Healthcare is Freakishly Expensive

      Chapter 12: Reduce Your Risk

      Chapter 13: Insure Yourself

      Chapter 14: Manage Health Risk

      Chapter 15: Long Term Care

      Section 4: Eliminate Your Fear of Paying High Taxes

      Chapter 16: Tax Introduction

      Chapter 17: Impact of Taxes

      Chapter 18: Timing of taxes

      Chapter 19: Options

      Conclusion

      Endnotes

      This book is Dedicated to all of the hard-working Americans who spent most of their life preparing for retirement as best as they could…

      …only to realize it was not enough.

      Introduction

      People are surprised when I tell them I’m in the fear-fighting business.

      But I thought you were a financial advisor, they say, looking at me puzzled and a little wary.

      I am indeed. Most folks assume that means I help people manage the money they do have or help them set their long-term financial goals to create solid retirement plans. When I first started in this business 35 years ago that’s certainly the extent of what I envisioned my career would encompass.

      More and more though, I find myself in the role of confidant as I sit and listen to my clients’ financial worries, which multiply the closer they get to retirement. They ask me, "Rich, how can I ever really be prepared?" It’s a valid question. When putting together a plan to prepare a client, how does an advisor calculate the right plan without knowing these main factors that impact the plan’s effectiveness?

      • No one knows how long they’re going to live

      • No one knows how the market will perform

      • No one knows what future interest rates will be

      • No one knows what future tax rates will be

      • No one knows what their healthcare needs will cost

      • No one knows what emergencies might come up

      It is understandable that seniors have financial fears regarding their retirement. Fear is often tied to the unknown and no one has a crystal ball. Unfortunately, there are some financial advisors who act as if they do. They develop bold financial plans for their clients based on random assumptions and potential market performance. And although time after time these plans fail to meet their clients’ needs and expectations, these advisors still manage to seem surprised when they disappoint.

      I wish I could I tell my clients that I have all the answers, but I don’t. What I do have—and what my company has consistently been providing satisfied customers for 35 years—are solid planning solutions that insure positive outcomes based on facts and guarantees instead of guesswork.

      But my clients nearing retirement are not the only ones worrying. The economic downturn of the past few years has created an atmosphere of fear so pervasive that two out of three Americans believe they will have to work until they die.¹

      An AARP poll published last summer revealed that among people ages 44 to 75, 61% were more afraid of running out of money than of dying.² I have found this to be a common fear among my clients who are retired or in the planning phase of retirement. When I ask them to list their biggest fears regarding retirement, people consistently list these four:

      1. Fear of outliving their money

      2. Fear of losing principal

      3. Fear of high healthcare costs

      4. Fear of high taxes

      Let’s take a brief look at each of these fears. Are they actually valid, or are they the products of media hype and fear-mongering geared at manipulating seniors?

      First, try to imagine how frightening it would be to live long enough that you would run out of money. No one, except maybe Vinnie the Shark, would give you a loan. I can’t envision you moving back in with Mom and Pop. And there’s no guarantee that your grown children would be in a position to help you.

      Sounds like a pretty legitimate fear to me. And you certainly wouldn’t be alone. The Employee Benefit Research Institute released a retirement-readiness study in July 2010 that found a third of middle-income workers will likely run out of money after 20 years of retirement. Those earning $30,000 or less can expect to run out in just10 years.³

      The reasons listed in the above study reflect the same fears my clients express: People are living longer, are not prepared enough financially, and are inadequately equipped to meet health care costs. Did you know there is a way to guarantee you will never outlive your money? The first section of this book will show you how.

      * * *

      The rest of the fears are directly related to the fear of outliving your money. Each fear is based on the knowledge that certain events will make running out of money more likely. For example, if you already have concerns about outliving your money, how afraid would you be if you lost half the money you have? Therefore, the second fear we will discuss is the fear of losing principal, one you may have already experienced. Investors lost more than $8 trillion in the global meltdown known as the stock market crash of 2008, including anyone who had a 401(k). Even if you haven’t lost principal chances are you know someone who has.

      I got my securities license in 1987 and kept it through the bull market years of the 1990s. Toward the end of 1999 I knew a downturn was inevitable. I told my clients to get out of the market and put their money into guaranteed products. The first dotcom bubble burst and the first huge crash came in 2000. The clients who took my advice swore that I walked on water. That’s absurd. But I’ve been known to surf from time to time.

      Roger B., a client of mine, passed the advice on to his father Mr. B, who dismissed my concerns as Y2K paranoia. He ended up losing 47% of his 401(k) fund in 2000. It shrunk from $100,000 to $53,000 so he had to postpone his retirement. The market would have needed to average 9.5% for seven straight years—from 2000 to 2007—for the $43,000 to return to its original $100,000. But the market did not perform that well.

      Mr. B still chose to stick it out, confident that the market would rebound because he said it always does. In 2008, when the market crashed again, he lost another 50%. He could potentially recover that 50% loss if the market earned about 10% per year for seven straight years. So by 2015, if the market averages 10% each year, he might be back to the amount he had in 1999. Then he can retire—16 years later than he had planned, with not a penny more than he had back then.

      If there were a way to invest your money so the principal would be guaranteed safe

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